ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Continued Volatility in the Gilts Market

As the financial meltdown affected the global economy, including India, the last quarter of the financial year 2008-09 witnessed high volatility in the domestic gilts market.

A Volatile Phase

The government bond market was looking for direction from the interim budget but the excessive borrowing programme brought volatility.

Impact of Government Borrowing Programme

A series of policy decisions by the Reserve Bank of India resulted in enhancement of liquidity in January, but the large borrowing programme of the central government pushed up rates.

Easing of Conditions

December 2008 saw the measures taken by the government and the central bank leading to the release of adequate liquidity into the system and a decline in short-term rates.


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